By providing more jobs, these companies are increasing options for workers looking for jobs. No one is forcing Uber drivers to drive passengers.
If there is a shortage of labor, then the prices paid to workers will increase due to market forces. If there is not a shortage of labor, then people that need jobs are finding them.
But there is nothing "market rate" about rank-and-file work for a company that's pouring gasoline on VC money and setting it ablaze. If demand for your labor is only due to artificially low prices, that demand will evaporate once growth targets are met.
See also: existing business that was disrupted. If the new service is not actually more efficient and was only able to undercut existing players on price because of VC money, there are no real long-term winners on the ground. Sure, maybe some founders, early employees, and investors net a tidy profit, but that profit isn't based on an actual economic contribution if the product isn't viable after the VC spigot gets turned off
Driving a taxi or delivering food is a pretty bad job, doing it as a self employed contractor is almost criminal. You have to cover all your own expenses and have no guarantee of work, with zero progression (ever heard of an Uber driving saving up and staring their own minicab business?). It’s a terrible economic decision.
The market does not correct for this as it is entirely controlled by a small group of companies.
So sure, nobody is forcing anyone to drive for Uber, but there are people who have to drive for Uber because they don't have any other opportunities in the short term.
It doesn't help that these jobs often have an attractive shine to them up front—fast, easy money! all you have to do is drive around!—but hide lots of costs—like massively increased wear and tear on your car—that there's no advertisement about, and no help in covering. If you have to keep driving to keep food on the table, it's also that much harder to take the time required to find a better job (though admittedly, that's not really qualitatively different from most low-end hourly-paid jobs, though it may be quantitatively, if your expenses end up wiping out enough of the income that you're effectively getting less than minimum wage).
Indeed. The minimum wage should be $20 an hour. If you can’t earn that much then you should be on the dole.
> The value of flexible work: Evidence from uber drivers
> Using data on hourly earnings for Uber drivers, we document the ways in which drivers utilize this real-time flexibility and we estimate the driver surplus generated by this flexibility. We estimate how drivers’ reservation wages vary from hour to hour, which allows us to examine the surplus and supply implications of both flexible and traditional work arrangements. Our results indicate that, while the Uber relationship may have other drawbacks, Uber drivers benefit significantly from real-time flexibility, earning more than twice the surplus they would in less flexible arrangements. If required to supply labor inflexibly at prevailing wages, they would also reduce the hours they supply by more than two-thirds.
This is a major debate in West at the moment, and in the UK it's synonymous with the term "zero-hour contracts": is it somehow OK to suppress unemployment figures by nominally employing more people but giving each one a smaller share of all the labour, and so, wages?
If the gig economy unsustainably employs people at cut-throat rates, then the statistics look good, and that spins the public opinion. Why would workers complain that they can't pay the bills if there are so many jobs out there? In fact, employment for peanuts is worse than no employment at all, because it is a lie perpetuated to try to avoid having to really deal with the issue of job poverty.
> What if...
Can you give an example of what you're talking about?
Fixed term contracts are allowable, because taking that thinking to the extreme would mean never being able to terminate a worker, even in cases where their employment becomes obsolete.
The issue revolves around "technically being employed" - having a contract which doesn't entail consistent or sufficient hours, and then not even having the choice to work enough to get by. This unfairly pumps employment figures for companies and the government, who can say that they have X workers, while denying an honest representation of how much people are actually able to work.
My original question was - is there an example of a job which could justify these kinds of fluctuations in working hours and subsequent income?
Painter, they can only work on days it's nice out. Kinda hard to paint when it's raining, and you can't get the day back.
By the same token many people of the “I’m middle class and I think this choice should be illegal.” persuasion genuinely think they’re making lower class people’s lives better by setting a minimum floor of some sort. They don’t think poor people can really make informed choices. It’s the same mindset as whorephobic feminists from Sweden or Iceland “protecting” women.
Now within this system there are two strategies to run a company, #1) employ people, make a product, sell it for a profit, rinse, recycle, keep going for decades if you´re good.
Or #2, for a short (but longish in human terms, several years at least, remember it´s a very, very slow system, and hey interest rates have been really low now for a decade), borrow money, employ people, make a product, and sell it for less than it cost to make.
Eventually with #2 the borrowed money runs out, but until it does you stand a more than decent chance of beating #1, and since you borrowed the money you can throw some great parties with it along the way.
For extra thrills and lolz, borrow the money from the banking system, so that when you can´t repay it, you crash the entire country with a credit crisis. Note there isn´t necessarily as clear a division between the two strategies as we might want, most companies need some kind of startup capital, and have to borrow that from somewhere.
Rather than borrowing, it induces a follow-on investment, capital, revenue and market (in cases), recruiting strength and other mindshare effects.
The smart money knows the exit strategy (and more importantly: timing ), the dumb money thinks it does, the hopeless money has no idea what exit strategy is.
The effect is similar to the debt model you describe, though structured differently.
now big finance saw they just need unicorns, not actual business models, so everything and anything is fair game and stocks are less sound than Vegas.
The whole point of “disruption” is that these businesses are squeezing out existing business which either provide more and/or higher-paying jobs.
To the extent that existing minimum wage and workers’ rights regulations haven’t caught up with the gig economy, these jobs looks like capital exploiting labor by having found a loophole in the rules.
http://fortune.com/2015/07/30/freelance-vs-full-time-employe...
There is usually a confusion of practical and moral responsibility, of course. Moral responsibility is a heuristic based on evolutionary incentives, that sometimes is and sometimes isn't useful for enacting change.
For starters these multi billion dollar gig economy tech platforms aren’t providing jobs (at least to the gig workers). Gig workers are independent contractors and by their very nature independent contractors are self-employed.
It’s all a massive fraud that harms society. How many non tech companies go public with $1B/year losses? None. The very same company who on one hand doesn’t give 40+hour workers employee benefits and on the other claim they are job creators.
Driving for Uber is like selling your stuff for cash. It's better than starving, but it's not a good choice.
It is an enormous pity that the taxi industry has not been disrupted more. If better service in every possible way is what disruption looks like count me in. Bring it on.
Other places have recognized the need to make taxi service more modern and less horrible and made changes—having their own ride-hailing apps for the local taxi service, for instance.
Not everywhere is New York City.
Even given its current state in the places you name, I don't believe that justifies handing over billions of dollars to sleazes like the ones at Uber, especially given that the people who do the actual work to make them that money are often working at what works out to less than minimum wage.
Two wrongs don't make a right.
How many people use Uber for the convenience and are not price sensitive? How many people use Uber who have cars but use it so they won’t risk getting a DUI? Heck we use it just when we don’t feel like going through the hassle of parking and dealing with traffic when we go into the city center from the burbs sometimes.
- Über replaces taxis. Taxi drivers are relatively well situated wrt to pay, insurance, etc. Uber drivers are working poor. Therefore, the middle class wins, the lower class suffers.
- In some cases, Uber replaces other modes of transportation, such as public transit. If you drive everywhere, you should hate Uber for clogging the streets. Also the environment, etc.
- Uber is a shitshow internally. Remember hw they bought nice jackets for everyone on the team, except the single woman because they wouldn’t get a mass discount on that jacket? Yeah...
Neither of these assumptions hold in practice.